Succession plans*

Define the features required to fill these posts in the event that they should be sought outside the company due to a need for an “emergency” change

Structured process for identification, fostering and development of “talents”

In its 3 March 2011 meeting the Committee for Internal Control, Risks and Corporate Governance analysed the organisational structure of the Pirelli Group with the assistance of the Chief People Officer. The Committee received an analytic description of the organisation of Pirelli & C. S.p.A. and its principal subsidiary, Pirelli Tyre S.p.A.

The Committee specifically examined the process for identification of the figures included in management and senior management. The Committee acknowledged the existence of a structured process for identification, fostering and development of "talents", ensuring that the Group will have "natural" succession mechanisms over the years to guarantee constant replacement of the generations through a structured internal growth process. In this regard, for instance, the Committee acknowledged that figures such as the Tyre General Manager, the Director of Group Management Control, the Product Director and other key figures in Senior Management have risen to their positions through a process of in-house development and growth.

The Committee also examined implementation of a structured process allowing the Company to (i) monitor key resources present in the Company and look for people in-house who may be capable of taking on primary roles of responsibility, or (ii) define the features required to fill these posts in the event that they should be sought outside the company due to a need for an "emergency" change.

The Board of Directors, in response to the proposal of the Committee for Internal Control, Risks and Corporate Governance, approved a recommendation that the next Board of Directors consider the possibility of setting up a special committee to:

propose definition of "emergency" plans for the replacement of:

the CEO;

the General Manager. The Committee must establish the necessary steps and the requirements for identification (in the company or elsewhere) of professional figures who could replace these officers in the event of an "emergency";

identify the criteria for possible plans to replace Top and Senior Management in order to ensure continuity in business strategies.

The committee would also monitor the succession plans described above and the process for identifying, managing and fostering talents destined to become the Group's senior management in the future.

* The information appearing in this section is provided in compliance with Consob's recommendation in its Communication DEM/11012984 of February 24 2011.